9/22/2008

New Op-ed at Fox News: Plausible Deniability?

The mortgage crisis has produced a massive case of political amnesia. That happens when one is trying to redirect blame for something that could cost up to $700 billion. Some who now claim that the mortgage crisis is the result of too little regulation saw things more clearly when so much wasn’t at stake.

The New York Times editorialized on Saturday that “This crisis is the result of a willful and systematic failure by the government to regulate and monitor the activities of bankers, lenders, hedge funds, insurers and other market players.” If you believe the Times or the Obama campaign, everything but government regulation is to blame for the crisis.

Yet, it is not just economists who were predicting these problems. For example, a September 30, 1999, article in the New York Times predicted exactly what has happened: . . . .

8 Comments:

The denial is not "plausible' but "willfull". The seeds were sown with the Community Reninvestment Act and politicalizarion of who got mortgages. It was aided by securitization of bad loans and easy money. Multiple warnings were issued before the collapse, and Barney Frank and his ilk prevented substantive action to rein in Fannie and Freddie's investment in bad loans or punish its executives for accounting frauds to cover up problems.

I wish it were really as innocent as "amnesia." If there is one thing the dems excel at, it's rewriting history. Just look at the success they have enjoyed with the Iraq war and the 2000 election. With respect to the latter, most dems actually believe that had the US Supreme Court not halted the recount, that Gore would have been president.

I am tired of the 'market' non-sense. Give me a reason why the labor market can never correct CEO's pay-for-failure. Check out Merryll Lynch's CEO. He ran his company to the ground and got a reward of 160 million. I will tell you why. There is never such a market; CEO got picked by the board, which is full of buddies who are a bunch of old boys network. They are scratching one other's bags and leaving share holders holding the bag.

I want to make sure I have my talking points clear. It has been pointed out that basis for blaming dems is the repeal of the Glass-Steagall Act which lead to deregulation of the financial institutions. This bill was signed by Clinton and lead to the crisis we have today. The sticking point is that the bill came out of the GOP congress and was sponsored by Gramm and Leach (two republicans). It was presented to Clinton with plenty of votes to override any veto. Is this not important?